Question

Innovation is the driving force in development; without innovative entrepreneurs we would not have most of the tools and services that provide many of us with prosperity today. From birth control to the internet, innovation has fundamentally changed the world. Despite this, most of the work on understanding the process of innovation and its relationship to public policy has been conducted in economies at more advanced stages of development. In fact, the importance of innovation is often downplayed for developing countries.

Discuss the conditions under which entrepreneurs in developing countries innovate.

Answer 1

More often than not innovation is a result of finding solutions to some perceived problems. The perceived problems in a developing vs developed state is quite different. For example in a developed nation comfort could be of very high value but the same may not be true for a developing nation.

In a developed nation most of the basic necessities are being solved and thus people find newer problems to deal with, and thus an innovator has newer problems to find solutions and thus innovates. The developing nation follows developed nation when it comes to reaching the next level and hence most of the innovations generate from developed nations.

Many a times developing nations do innovate but the innovation is in terms of the problems which are more localised initially and once a solution is find it can be used globally.

For Example, In India, Flipkart an online marketplace, introduced pay on delivery as indians find it very difficult to trust others with money. This innovation revived the online marketplace industry as users can now order and once they receive the product than only they pay. Thus innovations for developing countries at times are due to localised issues